The Impact of Covid-19 on Chronic Pain Practices

Summary:  As a significant number of anesthesia groups have a chronic pain component, we felt a review of the pandemic's impact on interventional pain management might prove beneficial. An analysis of several groups providing pain management services yielded some surprising results.

As the largest provider of outsourced billing and practice management services to the American anesthesia community, we tend to focus primarily on the impact of regulatory and economic changes on our anesthesia clients; but a significant percentage of our clients also provide a range of chronic pain services. This raises the question of how these practices fared in 2020 as the pandemic was unfolding across the country. Answering this question and understanding what distinguishes the services of anesthesiologists providing chronic pain management from those provided in the operating room and delivery suite requires a very different analytical lens. It is easy to oversimplify the impact by suggesting that Covid caused a reduction in activity, which resulted in a drop in revenue. Such a perspective fails to recognize the potential of chronic pain as we move into a post-Covid era.

Distinctions in Practice

Let us begin with a quick review of what distinguishes chronic pain from a management perspective. While anesthesia providers must navigate what can sometimes be complex clinical challenges, we can measure production in terms of cases performed and units billed. In the operating room and delivery suite, anesthesia providers are captive to a variety of stakeholders for their income and lifestyle. They have little or no control of such critical factors as volume and payer mix. Ultimately, the expectation is that all anesthesia providers function as a team offering the same quality and expertise to all patients. It should also be mentioned that the burden of call is often the most onerous aspect of their job.

The market and potential for chronic pain services is defined by the more than 60 million Americans who suffer from some form of chronic or intractable pain. While many pain practices are hospital based, the allure of the specialty is the ability to define one's practice based on the particular skills and expertise of the provider. The result epitomizes the observation that if you have seen one chronic pain practice you have seen one chronic pain practice.

A review of our client base indicated that about two thirds of all anesthesia practices provide some form of chronic pain management services. Most are limited in scope and only involve a few members of the practice. The ultimate criteria for defining a serious pain practice, however, can be defined as follows: they represent a full-time commitment to pain management and the financial results are comparable to or better than those working in the operating room or delivery suite. For purposes of this discussion, we selected those practices that consistently generated more than $2,000 per provider day, a yield that would result in an MGMA median level of compensation for the specialty of anesthesia. Based on this criterion, we identified 11 practices, which are the basis for the following analysis.

Determinants of Productivity

Three factors determine the revenue potential of a chronic pain practice: the number of days a practitioner works, the average encounters per provider day and the average yield per encounter. When we examine the impact of each of these factors, some interesting results emerge. The most significant impact of Covid-19 was the availability of facility time to provide services, but it did not materially impact the nature of the services provided or the revenue potential per provider day.

Obviously, many facilities closed in March and April of last year. For this study, we divided the calendar into three periods: pre-Covid, Covid and post-Covid. The pre-Covid baseline is based on activity from January 2019 through March 15, 2020. The Covid period represents activity from March 16 through the end of June. Most practices then started to recover, so we refer to the period from July 2020 forward as post-Covid. When we divide the number of provider days by the number of months in each period and then by the number of providers who were scheduled, the results are almost counter-intuitive: chronic pain providers really did not see a reduction in the number of days they worked. The table below shows the average provider days per month, by practice, in the sample.

The second productivity factor is the average number of encounters per provider day. For purposes of this analysis, we divided all encounters into three categories: new patient work-ups, procedural encounters and non-procedural follow-up encounters. New patient work-ups are essential to the ongoing viability of the practice and must remain strong because they will result in procedural encounters, which is where the majority of revenue is generated. Non-procedural follow-up encounters are not profitable but inevitable. Curiously, the impact of Covid was actually positive for most chronic pain practices as the percentage of procedural encounters increased slightly between March and June.

The third piece of this puzzle is determined by the yield per encounter. The table below is based on date of service collections. In other words, these are based on actual collections posted to date by category. It is important to note that, while these number show a 13 percent drop in the yield per encounter from pre-Covid to post-Covid, some of this drop may yet be recouped. The impact of Covid on claims processing had a number of dimensions. Many insurance plans experienced a slow-down in processing as a result of having employees work from home. Many patients found it harder to pay their portion as a result of unemployment and economic uncertainty. The good news is that when we compare the post-Covid yield per encounter to the pre-Covid yield, it is up one percent. In other words, the economic viability of chronic pain is still strong.

When we then put all these pieces together, the following is evident: the average chronic pain practitioner saw a 21 percent drop in yield per provider day from pre-Covid to Covid, but post-Covid yields are only down 3 percent from pre-Covid. Depending on the practice—and results did vary considerably from practice to practice—2020 total provider income was probably down 10 percent, but this was a one-time hit. The prospects for 2021 are quite bright as the volume of services provided continues to increase. If you want to see how your chronic pain practice was impacted by Covid, please contact your account executive for an analysis or reach out to us at info@anesthesiallc.com.